Sportbilly
Member
Um, no- it's worth 80 million shares multiplied by the current market price per share. Microsoft itself is worth a lot more than $8 billion.
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Microsoft Investor Wants To Fire Ballmer And Sell Xbox Division
- Thread starter Syphon Filter
- Start date
Um, no- it's worth 80 million shares multiplied by the current market price per share. Microsoft itself is worth a lot more than $8 billion.
TechnicPuppet
Nothing! I said nothing!
Any losses are already losses and investments are already investments. They have been made to make a profit going forward and they have been for years now.
Surely these investors must know this. The Xbox division will be making more than ever when XB1 launches and they continue to sell the massively popular 360.
Surely these investors must know this. The Xbox division will be making more than ever when XB1 launches and they continue to sell the massively popular 360.
- If they lose a $10 billion division profit, you can be sure people will get fired before someone can complain.
- ValueAct simply wasn't there, the others were held at bay by Bill Gates who supported the project.
- Complaining about the general losses of the company and hoping that PS business might turn around and keep Sony afloat for another couple of years like it did with the PS2.
- ValueAct has support as shown last month when they demanded a board seat, and a lot of major stockholders have been unhappy with Ballmer's direction.
- They can force quite a bit even without being majority shareholder. They could for instance sell their stock and cause a huge drop. ValueActs buying of the stock made the stock rise with 3,6% because of their previous performance at other companies.
weevles
Member
It's not bullshit for investors to base their decisions on the best information available. Only the foolish would pretend that for the first eight years of its life Xbox wasn't causing the majority of the losses in its division. The huge expenses associated with launching two consoles and then fixing all the faulty 360s are well documented.
Oh i'm not saying they were reliable, but they were much better sellers than let's say, Windows phone, Surface, zune. Every hardware platform except xbox has tanked pretty hard right?
starwarsfan541
Banned
I know, Nintendo doesnt buy much, but you cant tell me they woulnt buy Rareware for the IPs alone.
I could see major pubs picking up the other studios, and I would love Sega of America picking up Age of Empires.
And the hardware xbox division is another story.
If you want to believe that the Xbox division on its own has been profitable overall, that's the only way to have the numbers work out. Considering most of this stuff is extremely recent, I highly doubt it.
Sakura
Member
Please, no Samsung Xbox, you're killing me.
While the Xbox may not have made up for the initial loss yet, if it isn't losing money each year now, and is instead making money back each year, does it make sense to kill it off now? Wouldn't it be wise to at least wait until the XBO has been out several years, and deciding on whether or not to make a new console after that?
While the Xbox may not have made up for the initial loss yet, if it isn't losing money each year now, and is instead making money back each year, does it make sense to kill it off now? Wouldn't it be wise to at least wait until the XBO has been out several years, and deciding on whether or not to make a new console after that?
spookyfish
Member
Yeah.
I bet the atmosphere at MicroSoft is so conducive to keeping your mind on your work right now. It seems to be a good move for Ballmer to leave, but maybe he should have held that info until after the company's (semi) global launch this year.
They are kind of in the middle of something ...
I bet the atmosphere at MicroSoft is so conducive to keeping your mind on your work right now. It seems to be a good move for Ballmer to leave, but maybe he should have held that info until after the company's (semi) global launch this year.
They are kind of in the middle of something ...
Penguins&PolarBears
Member
Well we have the actual Microsoft board members coming out and saying that it's not going to happen, that's about as definitive as you can get:
http://www.zdnet.com/microsofts-bal...-want-to-be-ibm-or-apple-and-more-7000019812/
starwarsfan541
Banned
More likely if Windows 8 doesnt pick up and the Xbox One launch underperforms.
Tallshortman
Member
It's not about just profit, it's about return on investment. It's not difficult to understand why investors think keeping windows strong is more worthy of the billions invested in xbox than the meager returns in comparison to windows that xbox brings in.
Don't think they care about sunk losses but more whether some projects could distract the company from a much better future, and thus much better shareholder value. This Ubben guy thinks MS could be the biggest company in the world again if they focus on certain things that seem not to include consumer businesses.
It may not help that some blame 'distractions' for Microsoft missing the boat on mobile and search. They can wave a cautionary tale from the past to make their point.
This is very early days though, could well amount to nothing. ValueAct's precise agenda isn't fully clear and the level of support amongst other institutionals and hedge funds is untested.
Palette Swap
Member
To be fair, he only says they don't want to become B2B only. Xbox isn't their only consumer brand.
YuriLowell
Member
You know it makes sense. Microsoft makes all their money in the enterprise.
Yeah because his biggest concern is the Xbox division.....oh wait.
starwarsfan541
Banned
Yep, and corporate positions can change very fast.
This just gives credence to the thought that if the Xbox One unperforms, its time for
popcorn.gif
The evolution of gaming continues. The birth and death of gaming companies has historically been a thing, so it shouldn't be a shock to think that it might continue.
The extremely important thing is there has to be a company to step up and provide the competition when one falls. Right now I'm not convinced there's a company that could do it better than Microsoft, or wants to try.
The decline of console gaming this gen? Been my belief. I'm not seeing anything that convinces me it's not.
The extremely important thing is there has to be a company to step up and provide the competition when one falls. Right now I'm not convinced there's a company that could do it better than Microsoft, or wants to try.
The decline of console gaming this gen? Been my belief. I'm not seeing anything that convinces me it's not.
Maximilian Kolbe
Member
Maybe not biggest,but still pretty
Beer Monkey
Member
Honestly Windows Phone (been around forever, I had a Windows Mobile/CE phone in 2001; remember all the Pocket PC PDAs?) and Zune were such disasters that I wouldn't be surprised if they lost $6 billion.
But I don't know.
Now we've got fucking Surface, and guess what, it's part of the EDD division so Xbox profitability is going to be even further obfuscated.
I don't know if Microsoft has broken even on the whole Xbox program. I wouldn't be shocked if the 360 alone has made a profit. But I still don't know.
Anybody in this thread who says they know is lying.
Ugh, this probably shouldn't have been posted on the gaming side.
When the Value Act guy says Xbox made "no money", he doesn't mean zero dollars, he means enough to justify his multi-billion dollars investment. MSFT stock price basically hasn't moved in five years ( lol until today).
When the Value Act guy says Xbox made "no money", he doesn't mean zero dollars, he means enough to justify his multi-billion dollars investment. MSFT stock price basically hasn't moved in five years ( lol until today).
The only thing multiple game consoles (and handhelds and PC) achieve is exclusives that I can't play because I'm not made of money for multiple multi-hundred dollar machines for one game.
I don't understand how anyone who follows console gaming can think this. You haven't noticed Sony reacting to MS, and vice versa? You think the entire xbox 180 happens if there's no PS4?
starwarsfan541
Banned
It took a beating in July.
starwarsfan541
Banned
dcx4610
Member
"When Peter Moore (pictured right), former president of Sega of America, arrived as a top Xbox executive, he sat in a meeting with CEO Steve Ballmer, who went into one of his classic shouting routines. Noting that Xbox Live was Microsofts ace, he shouted, Xbox Live! and pounded the table. He did it over and over. Xbox Live! Xbox Live! Xbox Live! Then he slammed into the Polycom conference phone with his fist, breaking it. He looked sheepish. Ed Fries turned to the astonished Moore and said, Welcome to Microsoft."
Ugh. Good riddance. I feel much better supporting Microsoft without someone like Ballmer around.
Ugh. Good riddance. I feel much better supporting Microsoft without someone like Ballmer around.
You have to remember that most "activist investors" care 0% about a company's long-term health. Usually they want to pump the stock short-term so they can dump their massive stake at an equally massive profit. They are activists insomuch in that they actively want to make a big-ass profit, then use that cash to purchase a stake in the next company they want to "help".
FrozenCell
Member
sell it to Nintendo
TechnicPuppet
Nothing! I said nothing!
That's a good point but it would literally be throwing away money at this stage. They could sell after a few years and let someone else bring out the next Xbox.
MS seem determined to hold onto everything. They are investing 2bn in Dell to make sure they still have someone concentrating on selling desktops and notebooks.
Ms has ~70 billions in cash reserves. That basicly is infinite in this context, your example just doesn't work out. With that thinking they would never enter a new market, cause it's natural that you first loose money. If you generate ~20 billions of profit per year you have to do something with it.
No they don't. People at the top get "killed", but not companies. A company doesn't directly loose money, if their share price gets lower. The only thing that can happen cause of a low share price, that resembles a "killing", is a hostile takeover. Impossible in Ms case.
mohsinkhan
Member
Did they announce who would succeed Mattrick (who will head Xbox under their recent restructuring)? Maybe this is just natural progression, I don't see them completely dissolving Xbox right away, it may take a backseat and see how the next 3-5 years play out with little money being allocated to the group.
Their money might be infinite, their other resources aren't.
Not entirely relevant though. These guys want to do away with the entire division basically and focus on enterprise (where the real money is); Doesn't take a genius to see selling enterprise equipment at $10,000+ with lower production costs will profit more than taking losses on each console sold with hopes of making a small % back on each game sold. Licensing of their server OS's, and other enterprise solutions is the way Value act wants to go. You can't entirely fault the investors though. Dropping that entire division makes their financials look rather cheery by comparison.
Iwata (laughs)
Palette Swap
Member
Yeah, you should never break these Polycoms like that. That motherfucker.
And with the bad rep the xbox one getting at this time... the xbox division don't give good sign for shareholders.
Heck... And if this news go out in to the mainstream media it can make future customers avoid the system with fears of dead console then sinking more the xbox division for the shareholders.
Heck... And if this news go out in to the mainstream media it can make future customers avoid the system with fears of dead console then sinking more the xbox division for the shareholders.
Its not that inaccurate.
They didn't own Skype nor have Windows Phone when they were racking up those big losses.
They've lumped all their duds in the division, Kin, Zune, but those would be placed in those years where the division made money.
I think you guys are not understanding the context of this investors comments. On a technicality, the Xbox division has made money in some years. But it ain't making Office type of money, or Windows type of money, and thats what these investors are looking for. They want the home run, not something that can only give you lead-off singles. These institutional investors want money poured into something with a big payoff, not something that just makes a tidy little profit, or keeps itself afloat, or god forbid gives losses.
Freeza Under The Shower
Member
for the Xbox360, yes, but we haven't seen what will be written off in terms of development and other costs (exclusives) for the Xbox One, and as a brand, it's locked to consoles where both competing parties have branched into a platform.
Unless MS intends to replace GFWL with Xbox branding across the board for all MS gaming applications, the brand is.. feeble, to say the least. If the Xbone fails, the brand goes with it. Japan is probably already lost, with little hope of recovery. The Windows Phone and Windows 8 do not show much signs of significant Xbox branding / integration, mostly because Windows 8 is big bad dud.
I can see why investors are getting restless and the Xbox being a logical target.
I do think it will do more damage than good to ditch it now though. Certainly if MS want to have at least some angle at PC gaming and wider Xbox branding. If the division is ejected, that opportunity is lost for good and MS will not some other brand to do it, which is pretty ridiculous at this point, imo.
But they don't directly compete. MS wasn't going to change the direction of the xbox one out of competition from Wii U. Nintendo has chosen to do their own thing.
Especially the expensive ones. They are like 6 grand plus....
Penguins&PolarBears
Member
Xbox IS their consumer brand. What Microsoft consumer brand is bigger than Xbox?
They just renamed all of their video and music services to Xbox because of this fact. It's not called Windows Music and Video, it's called Xbox Music and Xbox Video.
I wouldn't be surprised if they start selling even more consumer electronics hardware under the Xbox brand name in their Microsoft Stores.
Windows 8 is selling well though and gaining about 2% market share every quarter. In a worst case scenario Windows 8.x sells over half a billion copies. I think the bigger issue for them is the declining PC hardware market and the need to convert many of their PC users to tablet users.
Xbox One in a worst case scenario sells tens of millions of units which makes Microsoft a major player in the living room. Remember the purpose of launching the Xbox in the first place was to block a Sony monopoly of the living room. That reasoning still stands today with Playstation still being a major player and Google/Apple trying to figure out a way into the market.
Randolph Freelander
Member
Second thing first, that was a metaphor. The stocks get hammered, that was the point. And also another metaphor, as it turns out.
First thing second, really, let me take it down another level. You ever heard someone say that it isn't worth his or her time to bend over and pick up a dime? You just don't seem to be getting the fact that all profits are not equal. Investors don't want you making 10% returns if they're used to 15, and that's just the bottom line. They want their 15%. If you can't give it to them with a business, then you don't continue that business. You focus on the parts of the business that can get you that 15%, and you get out of the rest (sell, shut down, whatever). Take the excess funds, return them to your investors, who will then reinvest those funds in other businesses that can achieve the desired high rates of returns.
Microsoft's investors don't want Microsoft to do everything possible and make every last dime and hoard all cash in perpetuity. That's just not good business.
cpp_is_king
Member
I'm pretty sure that someone with a 2 billion dollar stake in MS is just a wee bit more informed than we are.
Goodwill doesn't generate revenue, and the fact of the matter is the entertainment division pulls in one of the smallest percentages of overall income.